PHYSICAL CAPITAL, HUMAN CAPITAL, AND THE HEALTH EFFECTS OF POLLUTION IN AN OLG MODEL

2021 ◽  
pp. 1-42
Author(s):  
Sichao Wei ◽  
David Aadland
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Health Effects ◽  
Capital Accumulation ◽  
Cognitive Learning ◽  
Physical Capital ◽  
Overlapping Generations Model ◽  
High Pollution ◽  
Balanced Growth Path ◽  
Key Driver

In a standard overlapping generations model, we show how the health effects of pollution impact the balanced-growth path (BGP) and the transition dynamics of the economy. The key driver is the differential between physical and human capital accumulation. The differential occurs because pollution alters the incentives to save and to invest in education via reductions in longevity and alters the effectiveness of education expenditures via impaired cognitive learning. Two predictions of the model are noteworthy. The first prediction is the existence of two stable BGPs with a separating saddle path. One BGP is desirable featuring high economic growth and low pollution, whereas the other should be avoided because it is associated with low economic growth and high pollution. The second prediction is that economic and environmental cycles may emerge, implying inequality between generations. These theoretical results are supported by empirical evidence and imply a role for government to steer the economy toward the desirable BGP and eliminate the cycles.

scholarly journals Population and Economic Growth Under Different Growth Engines

2017 ◽  
Vol 18 (2) ◽  
pp. 182-211 ◽  
Author(s):  
Alberto Bucci ◽  
Xavier Raurich
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Capital Investment ◽  
Human Capital Investment ◽  
Physical Capital ◽  
Long Run

Abstract Using a growth model with physical capital accumulation, human capital investment and horizontal R&D activity, this paper proposes an alternative channel through which an increase in the population growth rate may yield a non-uniform (i.e., a positive, negative, or neutral) impact on the long-run growth rate of per-capita GDP, as available empirical evidence seems mostly to suggest. The proposed mechanism relies on the nature of the process of economic growth (whether it is fully or semi-endogenous), and the peculiar engine(s) driving economic growth (human capital investment, R&D activity, or both). The model also explains why in the long term the association between population growth and productivity growth may ultimately be negative when R&D is an engine of economic growth.

scholarly journals ENVIRONMENTAL POLICY, EDUCATION AND GROWTH: A REAPPRAISAL WHEN LIFETIME IS FINITE

2011 ◽  
Vol 16 (5) ◽  
pp. 661-685 ◽  
Author(s):  
Xavier Pautrel
Keyword(s):  
Human Capital ◽  
Environmental Policy ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Monetary Economics ◽  
Physical Capital ◽  
Positive Influence ◽  
Overlapping Generations Model ◽  
Final Output ◽  
Source Of Pollution

When finite lifetime is introduced in a Lucas [Journal of Monetary Economics 22 (1988), 3–42] growth model where the source of pollution is physical capital, the environmental policy may enhance the growth rate of a market economy, whereas pollution does not influence educational activities, labor supply is not elastic, and human capital does not enter the utility function. The result arises from the generational turnover effect due to finite lifetime and it remains valid under conditions when the education sector uses final output as well as time to accumulate human capital. This article also demonstrates that ageing reduces the positive influence of environmental policy when growth is driven by human capital accumulation à la Lucas in the overlapping-generations model of Yaari [Review of Economic Studies 32 (1965), 137–150] and Blanchard [Journal of Political Economy 93 (1985), 223–247].

Capital accumulation and growth in Hungary, 1924–2006

2011 ◽  
Vol 61 (2) ◽  
pp. 143-164 ◽  
Author(s):  
B. Leeuwen ◽  
P. Földvári
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Volume Index ◽  
Growth Accounting ◽  
Simple Method ◽  
Long Run ◽  
Over Time

The objective of this paper is to analyse the role of both human and physical capital in economic growth in Hungary during the 20th century by extending the already available data on physical and human capital. Besides the standard measure for the volume of human capital, we develop a simple method to estimate the value of the human capital stock in Hungary between 1924 and 2006. While the volume index slowly grows over time, the value of human capital shows a decline during the late socialist period. Applying the value of human capital in a growth accounting analysis, we find that the Solow residual has no long-run effect on economic growth anymore.

scholarly journals Capital formation and economic growth under central planning and transition: A theoretical and empirical analysis, ca. 1920–2008

2015 ◽  
Vol 65 (1) ◽  
pp. 27-50 ◽  
Author(s):  
Péter Földvári ◽  
Bas van Leeuwen ◽  
Dmitry Didenko
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Growth Models ◽  
Physical Capital ◽  
Early Years ◽  
National Accounts ◽  
System Of National Accounts ◽  
Long Run ◽  
Physical Capital Accumulation

According to the consensus view, it was primarily physical capital accumulation that drove economic growth during the early years of state socialism. Growth models incorporating both human and physical capital accumulation led to the conclusion that a high physical/human capital ratio can cause a lower economic growth in the long run, hence offering an explanation for the failure of socialist economies. In this paper, we show theoretically and empirically that according to the logic of the socialist planner, it was optimal to achieve a higher physical to human capital ratio in socialist countries than in the West. Using a VAR analysis, we find empirical confirmation that within the Material Product System of national accounting, the relative dominance of investment in physical capital accumulation relative to human capital was indeed more efficient than under the system of national accounts.

scholarly journals A Dynamic Analysis of the Relationship among Human Development, Exports and Economic Growth in Pakistan.

2009 ◽  
Vol 48 (4II) ◽  
pp. 885-920 ◽  
Author(s):  
Muhammad Afzal ◽  
A. Rauf Butt ◽  
Mr. Hafeez ur Rehman ◽  
Ishrat Begum
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Human Development ◽  
Granger Causality ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Causality Test ◽  
Real Gdp ◽  
Long Run ◽  
Short Run

This study investigates the econometrically empirical evidence of both the short-run and long-run interrelationships among human development, exports and economic growth in an ARDL framework for Pakistan. This study also examines causal linkages among the said variables by applying the Augmented Granger Causality test of Toda-Yamamoto (1995). By using data on Pakistan’s real GDP, real exports and Human Development Index (HDI) for the period 1970-71 to 2008-09, three models have been estimated. The results show cointegration between economic growth, physical capital, real exports and human development when human development is taken as dependent variables. Furthermore, unidirectional Granger causality running from real GDP to real exports has been found in Bivariate, Trivariate and Tetravariate causality framework. The inclusion of HDI as a measure of human development reduces the physical capital share in real GDP whereas it improves the robustness of the regression model. Real GDP seems to provide resources to improve human development in only the long-run while human capital accumulation does not seem to accelerate real GDP both in the short-run and the long-run. The empirical results of the study do not support ‘export-led growth hypothesis’ and human capital-based endogenous growth theory in case of Pakistan, however, it does support ‘growth-driven exports hypothesis’ in case of Pakistan. JEL classification: O11 Keywords: Human Development, Exports, Economic Growth, ARDL, Causality

scholarly journals IS HUMAN CAPITAL ACCUMULATION A GROWTH DRIVER IN NIGERIA? AN EMPIRICAL INVESTIGATION

2018 ◽  
Vol 3 (2) ◽  
pp. 66-77
Author(s):  
Hassan O. Ozekhome
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Physical Capital ◽  
The Other ◽  
Series Data ◽  
Human Capital Accumulation ◽  
Infrastructural Development ◽  
Long Run ◽  
Physical Capital Accumulation

Accumulation of human capital is critical to sustained economic growth in the long run, since it facilitates the efficient absorption of new capital developments, improves the speed of adaptation of entrepreneurs and generates innovation necessary for sustained economic growth. It is against this premise this study investigate the human-capital accumulation growth-nexus in Nigeria. Employing a dynamic approach, involving test for unit roots, and cointegration, and finally, the Generalized Method of Moments (GMM) estimation techniques on annual time series data, covering the period 1981 to 2016, sourced from the World Bank Development Indicators (WDI) and Central Bank of Nigeria (CBN) Statistical Bulletin, the empirical findings reveal that human and physical capital accumulation significantly induce rapid and sustained economic growth in the long-run. The other variables- infrastructural development (measured by ICT infrastructure) and industrial output (a measure of industrialization) have positive but weak impacts on economic growth, on account of the weak infrastructural development, and low level of industrialization in Nigeria. Inflation rate (a measure of macroeconomic policy environment) on the other hand, is found to have a militating effect on economic growth. We recommend amongst others; sustained investments in human and physical capital accumulation, stable and coherent macroeconomic policies, particularly with respect to taming of domestic inflationary pressures, supportive institutional structures and aggressive industrialization-enhancing policies, in order to enhance sustained economic growth in Nigeria.

scholarly journals Economic growth and labor market friction: a quantitative study on Japanese structural transformation

2016 ◽  
Vol 17 (1) ◽  
Author(s):  
Seung-Gyu Sim ◽  
Seungjoon Oh
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Labor Market ◽  
Structural Transformation ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Labor Market Institutions ◽  
Human Capital Accumulation ◽  
Market Friction ◽  
Labor Market Friction

AbstractThis paper develops a tractable multi-sector endogenous growth model with labor market friction and human capital accumulation to analyze the underlying link between economic growth and labor market institutions. The model, calibrated based on the Japanese structural transformation episodes, demonstrates that lifetime employment system has contributed to unprecedentedly rapid economic growth, by enhancing human capital accumulation and facilitating physical capital formation. The counterfactual experiment finds that had the job durations of a typical worker been 1 year (roughly one tenth of the actual average job duration) for 1960–1990 in the Japanese labor market, the non-agricultural GDP per capita in 1990 would have accounted for 71 percent of the actual values.

HOW LONG DOES ECONOMIC INJUSTICE LAST?

2021 ◽  
Vol 255 ◽  
pp. 69-78
Author(s):  
David Miles
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Human Capital Accumulation ◽  
Distribution Of Wealth ◽  
The Past ◽  
Economic Injustice ◽  
Past Wrongs ◽  
Past Injustices

This article assesses whether economic injustices that took place in the past still have significant implications for the material welfare of people many years later. That issue is central to the question of how fair is the distribution of wealth and income today. It is also relevant to issues of reparations for past wrongs. I find that in standard neoclassical models of economic growth the lingering effects of injustice from more than 70 years ago are generally small. But effects can last much longer once we allow for impacts of past injustices to be transmitted through human capital accumulation as well as physical capital.

Human Capital Accumulation and Resource Abundance

2011 ◽  
pp. 66-77
Author(s):  
O. Vasilieva
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Relevant Literature ◽  
Harmful Effect ◽  
Human Capital Accumulation ◽  
Resource Abundance ◽  
Empirical Results ◽  
Theoretical Predictions ◽  
Crowd Out

Does resource abundance positively affect human capital accumulation? Or, alternatively, does it «crowd out» the human capital leading to the deterioration of economic growth? The paper gives an overview of the relevant literature and discusses both theoretical and empirical results obtained regarding the connection between human capital accumulation and resource abundance. It shows that despite some theoretical predictions about the harmful effect of resource abundance on human capital accumulation, unambiguous evidence of such impact that would be robust with respect to the change of resource abundance parameter has not been obtained yet.

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